Retail experts predict 2014 & beyond
A matter of perspective
At least if Amazon.com CEO Jeff Bezos has his way, we won't need to go to the shops anymore: Everything will be delivered to our doorstep from the sky by "octocopter" drones.
Every twelve months we ask trade gurus from around the world for their take on the future and the shape of things to come. Pundits from online start-up operations to corporate finance experts were invited to answer the question: “What do you see as the most exciting development in retailing or the fmcg industry and the most important challenge for the future?”
As their predictions are self-explanatory we give them below in alphabetical order of surname:
David Bosshart, CEO, Gottlieb Duttweiler Institute:
“Omnichannel, not online; offline or multichannel is rapidly becoming the standard for successful retailers. Cross-networked data management skills complement traditional retail skills.”
Dagmar Bottenbruch, Angel Investor and Consultant:
“I would challenge food companies to be more proactive and constructive on how they deal with criticism. Instead of being almost militant against criticism – why not develop a real dialogue with those concerned about too much sugar, meat, processed food etc.?
Social media are shifting power to the consumer and thus the control of brands, and this will continue.
The most “creative” social media presence of many Food & Agricultural businesses seems to be cooking recipes…This can’t be it! The first company that becomes more transparent, involves the customer, and adjusts the business model will win!”
Pete Clifford, International Business Director, Linas Matkasse:
“Went back and had a look what I said exactly one year ago and thought I would review my own forecasts!
2012: I am of the opinion that a few of the players in the German market for "traditional" online food delivery are starting to get the customer offer right (Rewe, Supermarket.de are good examples), and, if they can continue to sustain investment in further improvements and market awareness for a few more years, then it could provide the chain-effect breakthrough everyone talks about/hopes for.
2013: Supermarkt.de got the customer offer right, but it’s not cheap to do that, and they did not have the backing of a strategic investor, only a financial one = went insolvent… Whereas Rewe are not only now getting the customer offer right, there are clear signs from the very top that they are going to start making it a strategic priority and investing for the long-term.
In the last year, Rewe have also been joined by DHL (via Allyouneed), who appear to want to play the role of “market-maker” in online food and represent another “strategic” investor into the market (rather than speculative financial investors).
The fact that they also want to help all players solve “the last mile” problem is a clear sign of the strategic view they are taking of eFood.
Even Tengelmann have shown some more serious intent in the eFood area with the latest release of their website: prices have finally been aligned to stores and the range has been vastly extended.
I am increasingly of the opinion that there is no hope for an online food “start-up” in Germany, the investment needed is too large and the ROI too long -- only a big player can handle it. For that reason I would expect to see a number of start-up players go insolvent.
2012: I look forward to seeing if Tesco.com can replicate the success of their business model from UK with launches in the Czech Republic and Poland.
2013. Not only have they done that, but they have also launched the service in 50 cities around the world, including in Thailand and China.”
Prof. Dr. Utho Creusen, Non-Executive Director Dixons plc, Non-Executive Director M.video ooo, Russia; Verwaltungsrat Theo Müller Group S.a.r.L, Luxembourg; Aufsichtsrat Unternehmensgruppe Theo Müller KGaA, Germany; Aufsichtsrat Nordsee, Germany:
“From an international point of view the most exciting development in retail is the renaissance of the stores as a core success factor of customer engagement and loyalty.
After all the online hype we are beginning to re-understand the importance of the physical store with attractive products, excellent offers, fascinating presentations and, last but not least, customer-focused employees.
Of course this has to be combined with a seamless offline experience. However, it is clear that we’ve discovered the human factor again, which gives hope for the future.”
Linda W. Eatherton, Partner, Director Global Food & Nutrition Practice, Ketchum:
“Looking at the global landscape, the most exciting development in the food retail sector is the deep integration of technology with the shopping experience to personalize shopping against variables such as personal, social and environmental values.
In the first wave of our global research, Food 2020: Consumer as CEO, conducted in 2008, we predicted this personalization would occur.
Today, we see new tools, widgets and apps popping up everywhere making it possible to create personalized shopping lists that truly reflect the things that are most meaningful to you.
Related to this development arises one of our most vexing challenges in food marketing and retailing. The challenge we face is how we will maintain our souls while making a profit in a customized world?
Will the marketplace splinter so much that mass marketed brands -- locally, regionally and multi-nationally -- simply will disappear? Will these brands 're-invent' to be more relevant to the variables consumers are selecting?
Will current brand favorites be able to hold their price, or will customization drive price to unattainable levels for most consumers? In a world where so many are hungry and unable to have access to good food, will catering to the technology-minded consumer put societal and human needs of the masses aside?
As an optimist I prefer to think that the technology-driven market place will allow marketers to create a selection of brands for those willing to pay elevated prices for that premium design.
And, the leadership companies who reap profits from this innovation will have a heart and redirect some of those profits to ensure others who simply need access to good food are able to eat and thrive.”
Professor Rodney Fitch, CBE:
“We tend to talk of ‘developments, challenges and opportunities’ as if they were something unique to the contemporary scene, whereas these components are the very stuff of retailing and always have been.
And, although the emphasis might change from year to year, the single biggest challenge in the organised retail landscape must always be ‘how to deliver a better customer shopping experience’.
At times this has required better logistics, service, design or location and much more, and all these factors, together with others, continue to be important.
But, as I look at the landscape in 2014, I consider the future of retail to be framed by the following:
> Value…since 2008, in-store, online; it's the price stupid, and only one retailer can be the cheapest !
> Big data…what you don't know will be your undoing!
> Technology…recognising that your customers are often savvier than your IT department!
> Innovation…continuously, both incremental and transformative -- innovate or capitulate!
These conditions must be allied to deliver a better customer experience than the competition -- both physically and digitally -- for this is, and always will be, the biggest challenge, the biggest opportunity and the holy grail of successful retailing.”
Tim Harrap, Head of Collaboration, Lye Cross Farm:
“The most exciting development is the expunging of the myth of eternal growth through consolidation and the corporatization of the economy.
From opposite ends of the economic universe the void that is the medium-sized enterprise will have to be filled to rebalance the twin horrors where we have extremes of commodification vs. exclusive (excluding?) luxury.
Those extreme positions are most likely to have forgotten that central to our future is our understanding and experience of the soul of business, the market and the individual.”
Ibrahim Ibrahim, Managing Director, Portland Design Associates Ltd.:
"In the next year The Sharing Economy will evolve further. There will be a substantial increase in the number of products and services that consumers will share.
There will be an increasing shift from ownership to shared access driven by the peoples' wish to shift their lives from an ‘asset-heavy' to an ‘asset-light’ existence.
The growth of the sharing economy is driven by urbanisation and smaller dwellings with single occupancy and less space for 'stuff'. People see sharing as more sustainable; it gives them an opportunity to share knowledge with peers and offers sociability.
The growth of the sharing economy is made possible by the proliferation of socialised, digital platforms.
Happiness from sharing lasts longer than happiness from buying stuff!”
Michael Sansolo, US industry consultant and contributing editor, MorningNewsBeat.com:
"In the era of mobile technology and Amazon talking about delivery by drone, technological advances continue to steal headlines and ideas about the future. But this was also a year of major leadership changes at companies like Safeway, Kroger and Delhaize America.
So in many ways the future may rest on a group of new leaders and their ideas on how to cope with a rapidly changing retail environment, continued economic sluggishness and heightened customer interest in food ingredients. The future is as uncertain as ever."
William S Webb MA, Senior Lecturer – Retail Management, The London College of Fashion:
“The increasing sophistication and affordability of 3D printing raises the scenario not only of the dream of Mass Customisation finally becoming a reality, but also of the consumer bypassing both the retailer and manufacturer to forge direct relationships with designers and creators.
This will fundamentally alter the distribution business model.”
Julian Wild, Partner, Corporate Finance for Rollits LLP:
"The rise of Waitrose has been very significant for UK retailing. According to Kantar Worldpanel, Waitrose’s UK market share is now 4.9 per cent and it is growing at 7.6 per cent. Whilst not as impressive as the discounters, it is having a major impact on the way the larger UK retailers react.”
The most important challenges are health and obesity, food waste, and, on the back of the horsemeat scandal, traceability throughout the supply change. These are big issues for manufacturers and retailers."
Statements collated and edited by Mike Dawson